By Tom Regan
If you want to know why I don’t believe that manufacturing jobs will be returning to the United States as President Trump promised in his election campaign – at least not the kind of manufacturing jobs that once existed in this country – then you need to travel back with me 20 or so years to the Harvard Business School.
Back then I had the chance to sit in on an entire course taught on the Ethics of Business. What I witnessed was fascinating.
The main argument in the class almost always boiled down to duty to shareholders. The professor would offer up example after example of a possible ethical conflict and in the end, the class would invariably break down into two groups: Those who felt that businesses had an ethical duty to society at large and those who felt the only duty was to shareholders and what was necessary to make them happy. This latter group was by far the much larger group and were often identified by the little shark stickers they would place on their cardboard name cards.
I think of that group to this day. By now, they are all in their late-40s and no doubt running business across America. And many of those businesses have probably dramatically changed their manufacturing processes. Some have outsourced their work to China or Taiwan or Thailand or Mexico. Many others have used technology and robots to improve the way they make their cars, air conditioners or tractors for example.
Making those cars or air conditioners or tractors are the jobs that are no longer available to many of the people who supported Donald Trump, the jobs he promised to bring back to help make America great…again. Recently I wrote about how technology is the main reason for the decline of these older forms of manufacturing jobs in the United States. Studies have shown that up to 87% of American manufacturing jobs have been lost to technological innovation while only 13% have been lost to trade or companies outsourcing their work to other countries. A recent McKinsey report showed that by 2050 almost 50% of current American jobs in all industries will be replaced by some form of technology.
I deliberately wrote “older forms of manufacturing jobs” because the jobs themselves have not been lost, they just changed. In September 2016 there were more than 300,000 manufacturing jobs available in the United States. But almost all required advanced education or training.
All these factors taken together show why these jobs aren’t coming back despite Trump’s promises. The first duty of publicly owned companies is to their shareholders, not to the “American people.” Much has been made of Donald Trump’s background as a billionaire businessman, so he knows how true this is. Even companies like Carrier and its parent company United Technologies, which did agreed to keep some jobs in the United States after being pressured by Trump, is still outsourcing an even greater number of jobs to Mexico because this will reduce costs and make shareholders happy.
Then there’s technology. Many people currently left unemployed by changes in the economy could find work again if they were willing to get that additional education or training. The truth is, however, many of these people just don’t want to do that. They want their old jobs back and really don’t want to deal with the fact that that’s not going to happen. In fact some industry experts have said that even if Trump did bring some of the jobs back to the United States, they would then be lost to technology.
Even more daunting is that McKinsey prediction because we are doing such a poor job right now of preparing young people for the future. A high school education will literally get you little more than a burger flipping job. Once it might have gotten you a good job driving a truck or a taxi but with driverless cars and trucks only a decade away from being an everyday reality that no longer holds true. Even burger flipping might be taken over by robots.
No, the jobs aren’t coming back, one at least not in their old form. Unfortunately, this will probably make people even angrier than they are now. What President Trump needs to be doing is what President Obama was trying to do and that is promote education at all levels and helping people understand that without that education they face a bleak, probably jobless, future.